NLBC.FR : What you should know about the URSSAF

What every company employing staff in France should know about the URSSAF.

In France, every company employing staff is likely to face an URSSAF audit (“Contrôle URSSAF”). The financial stakes can be high, especially if the company is unprepared. Surprisingly, most foreign companies do not know what the URSSAF is and are not aware of the risk they are exposed to.

This article will answer the most common questions asked by companies about the URSSAF.

1. What is the URSSAF?

URSSAF stands for “Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales” - the Institutions for the Collection of Social Security and Family Benefit Contributions.

In France, all companies must pay social security contributions on the remuneration paid to their employees. The URSSAF is the institution which collects these compulsory contributions.

2. What is the purpose of an URSSAF audit (“contrôle URSSAF”)?

The purpose of the URSSAF audit is to check whether or not a company is complying with the rules governing the calculation and the payment of social security contributions.

3. How is an URSSAF audit carried out?

For companies with fewer than 11 employees, the URSSAF carries out the audit at its own offices, based on information and documents provided by the company.

For larger companies, the URSSAF carries out an on-site audit.

In either case, the company is sent a notice called an “avis de contrôle” which sets out the audit date. According to the Social Security Code, this notice must be sent at least 15 days before the URSSAF inspector’s first visit. However, the Charter defining the contributor’s rights (“la charte du cotisant contrôlé”) which is binding of the URSSAF is more favorable since it provides that this notice must be sent at least 30 days before the inspector’s first visit.

4. What powers does the URSSAF inspector have during the audit?

The inspector has very broad powers, including the right to:

• enter the company’s premises;
• request any existing document necessary to carry out the audit; and
• question any person who is paid by the company in order to establish their name and address, the nature of the activities they carry out and the amount of their remuneration.

5. What are the main causes of reassessment?

Many companies believe, in good faith, that some of the benefits they grant to their employees (on top of their regular salary) are not subject to social security contributions.

Unfortunately, the notion of remuneration that is subject to social security contributions is broad and, in contrast, the notion of business expenses (“frais professionnels”) which can be deducted from the calculation base of social security contributions is fairly restrictive.

As a result, many practices often lead to a reassessment.

For example, a company organizes a party or a trip to reward or retain employees; the company pays mileage allowances to employees who do not justify the use of their personal car for professional purposes; or the company reimburses meal expenses to employees who are not a business trip.

It is therefore highly recommended that companies seek expert advice on how to calculate their URSSAF contributions.

6. What happens after the audit?

Once the audit is finished, the inspector must send the company a document explaining the grounds for reassessment and why they consider that certain sums should have been subject to social security contributions. This document is entitled “Lettre d’observations".

Once the company has received this, it can challenge the reassessment within a 30 day-period. It may also request an extension to 60 days.

The inspector must respond to the company’s arguments. If the inspector is persuaded, they may reduce the amount of the reassessment.

The company will then receive a formal notice to pay the social security contributions which should have been paid and penalties (5% of the reassessed contributions + 0,2% for each month or fraction of a month of delay). This formal notice is called « Mise en demeure ».

 7. Is it possible to appeal against the URSSAF’s final decision?

Yes. The company can lodge an appeal before the Amicable Appeals Committee (“Commission de Recours Amiable”) which is an internal URSSAF committee. The company may also bring an appeal against this committee’s decision before the tribunal.

Article written by Alexandra DABROWIECKI and Marine MUSA from MGG Voltaire, member of NLBC